Government policy towards multi-national corporations

Todd Kaplan, Israel Luski, David Wettstein

Research output: Contribution to journalArticlepeer-review

2 Scopus citations


We analyze an environment with asymmetric information where a country tries to attract a multi-national corporation. The country can use both taxes and grants to meet its objective of maximizing net revenues. We show that when the country has private information it can often convey it via its choice of a tax-grant pair. When the tax rates are unbounded the country is able to extract the full surplus. The existence of an upper bound can in some cases reduce the payoff to a stronger country.

Original languageEnglish
JournalEconomics Bulletin
Issue number1
StatePublished - 1 Dec 2003

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (all)


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